A consultation document setting out how the powers and accompanying safeguards used in the investigation of tax crime could be modernised was published by HMRC today.
HMRC is responsible for investigating suspected criminal activity across the whole range of its responsibilities, including investigating tax credit fraud and VAT fraud, which can involve organised crime.
HMRC is seeking views on applying the relevant provisions in the Police and Criminal Evidence Act (PACE) across all its activities. Currently, those powers and their associated safeguards are only available for specific taxes and duties. Having the same law apply across the board will be clearer for those under investigation and will increase the effectiveness of HMRC's investigations, argues the authority.
PACE doesn't apply in Scotland, and views are also sought on the provisions that would provide an effective and fully integrated regime that is appropriate for Scotland's legal system.
Currently HMRC relies on provisions inherited from its predecessor Departments – the Inland Revenue and HM Customs and Excise. These differ which means that HMRC has no powers of arrest and detention for ex-Revenue matters. This "leads to a number of difficulties," says HMRC, including problems obtaining police support. It already has powers of arrest for offences that would previously have been within HMCE's remit.
Arranging for a constable to take a suspect's fingerprints can cause delays and "can raise logistical and security issues," adds HMRC in its consultation. "If appropriately trained officers of HMRC were allowed to take fingerprints this would establish the identity of detainees and prints at crime scenes more quickly without using police resources. It would also help HMRC to take better advantage of new technology which allows fingerprints to be identified quickly."
Modernising these provisions would give trained officers harmonised powers to apply for search warrants and production orders, and powers of arrest across all taxes, all of which would be subject to the important safeguards which attach to criminal investigations generally, says HMRC.
HMRC anticipates that, in light of responses to this consultation, specific proposals will be worked up in detail, on which there will be a further opportunity to comment.
